Frustrated Wellington rail commuters will benefit from a massive Government investment in public transport designed to reduce congestion and delays.

The announcement of nearly $900million for national public transport projects will buoy proponents of Wellington's costly proposed light-rail system.

Wellington Mayor Celia Wade-Brown immediately called for urgent work to establish a central city light-rail or tram system.

Local and central government must work together to improve the reliability and punctuality of commuter rail, she said.

"Many of Wellington's workforce commute by train from Kapiti, Porirua and the Hutt Valley so this will relieve congestion and improve productivity.

"However, Wellington's main railway station is at the north of the CBD and planning for funding rail or trams to the south must begin urgently."

The New Zealand Transport Agency announced yesterday it would pump $9billion into upgrading existing local transport systems over the next three years.

The money includes nearly $900m – a 33 per cent hike – devoted to public transport, "with a particular focus on improving the reliability and punctuality of commuter rail services in Auckland and Wellington".

NZTA chief executive Geoff Dangerfield said it was the biggest investment in public transport under the National Land Transport Programme.

The investment followed discussions with councils about their transport priorities over the next three years and would give them certainty as they prepared long-term infrastructure programmes.

Details of exactly what would be funded would not be released for several months. But the increased spending on public transport was targeted at "improving peak-time services which help to reduce severe congestion", Mr Dangerfield said.

The announcement is likely to be welcomed by frustrated Wellington train commuters.

The KiwiRail-operated Tranz Metro network has been plagued by breakdowns, delays and cancellations in recent years, despite most of the work on a $315m upgrade to Wellington's ageing network being completed last June.

KiwiRail's acting chief executive, David Walsh, welcomed the news. Wellington's Tranz Metro services would continue to improve with the introduction of the new Matangi trains and further commuter rail network upgrades.

These included replacing and upgrading overhead power lines and poles, slope stability work, new fibre-optic communications cables, and upgrades to tunnels, passenger facilities and stations.

NZTA planning and investment general manager Dave Brash said investigations into the feasibility of light rail were under way in Greater Wellington regional council's public transport spine study. A reserve fund of about $70m had been set aside by NZTA for new projects if robust business cases were provided.

However, Greater Wellington chairwoman Fran Wilde said yesterday's announcement had no bearing on light rail. A preferred option was yet to be decided and any construction was still years off.

"The good or bad news for us will be when we see what we get as a region. Until then, I wouldn't be popping the champagne corks."

Meanwhile, Mr Dangerfield warned that, though public transport funding had increased, other funding to maintain local roads and state highways remained tight. The agency hoped to shave up to 15 per cent in costs through "efficiency gains".

It meant some low-volume roads would not be maintained while high-volume roads would remain the priority.

"There's a limit to what even $9b can support, and we need to ensure that limited funding is carefully targeted to the areas and the activities where it is needed the most."